Siemens AG said it won a 460 mln eur order from the US Postal Service (USPS) to expand its PARS mail sorting system at all of its domestic centres. The Postal Automated Redirection System (PARS) expedites mail forwarding and other postal processes. Siemens will expand this system over the next 28 months.
Read MoreAmerican parcels giant UPS is working with investment bank Goldman Sachs to explore whether it should enter the fray for Exel, potentially triggering a bid battle for the British supply chain company. UPS, which is valued at USD78billion (pounds 42billion) and has very little debt, has long kept a watching brief on Exel, which on Thursday revealed it had received a preliminary takeover approach from Deutsche Post, the German owner of the DHL courier business. Exel shares slipped 3½ yesterday to pounds 11.75, valuing the business at pounds 3.4billion. UPS has been building up its freight forwarding operations, through 2001’s USD450m acquisition of Fritz and last year’s USD150m purchase of Menlo Worldwide Forwarding but lacks Exel’s strong presence in contract logistics – managing the supply chain for blue-chip companies.
Acquiring Exel would maintain UPS’s leadership in parcels delivery, freight forwarding and contract logistics.
Top executives at Exel are set to meet their counterparts at Deutsche Post this weekend to try and hammer out the terms of a deal with the aim of launching a bid within the next two weeks. “Both sides are trying to get a deal done as fast as possible but nothing has yet been agreed,” one person close to the situation said. The push to accelerate talks between the UK logistics company, which has a market valuation of Pounds 3.44bn, and Europe’s biggest postal group came as investment bankers scrambled to try and interest counterbidders in a potential deal.
Read MoreUPS today announced plans to raise its cap to 12.5% on the fuel surcharge applied to UPS Next Day Air®, UPS 2nd Day Air® and UPS 3 Day Select® and U.S. international air services beginning Oct. 3. A fuel surcharge on UPS Ground services is unaffected and continues to fluctuate monthly based on the U.S. Energy Department’s On-Highway Diesel price. It will stand at 3% in September.
UPS introduced a 9.5% cap on the fuel surcharge for its premium Air services in January of this year after prices began advancing rapidly toward the end of 2004. Since that time, jet fuel prices have increased more than 60%.
Deutsche Post may have made the first move on Exel but it is unlikely to be the sole bidder. UPS, the US package delivery company, and TPG, the Dutch logistics group, have also been touted as possible bidders. Alastair Gunn, analyst at Arbuthnot Securities, says: “Whether it is Deutsche Post who ends up with Exel, is doubtful. I think UPS is likely to outbid them.” He adds: “In terms of other companies coming in, nobody else can compete. It would be a waste of management time and energy.” An acquisition of Exel by UPS would underline the Atlanta-based company’s ambition to increase its presence in Europe, where it is challenging the dominance of DHL, owned by Deutsche Post, and TNT, owned by TPG.
UPS has become increasingly reliant on international revenues, especially in Europe and Asia, to offset slowing growth and increasing competition in the US.
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